Centralized Exchanges vs Self-Custody: Who Keeps Your Cryptos Safer

Cryptocurrency holders face a difficult decision when it comes to storing their assets: exchange custody versus self-custody.

Binance founder CZ sparked controversy by suggesting that cryptocurrencies are safer on centralized exchanges than in self-custody, citing the difficulty of measuring losses outside public view. This claim was based on data from analyst Willy Woo, which estimated about 1.57 million BTC have been lost through self-custody compared to roughly 1.51 million BTC lost on exchanges.

However, experts argue that self-custody offers full key ownership and control for users, while exchange custody provides managed security. The right choice depends on investor experience, security needs, and risk tolerance.